On 31 August, the association “Zemnieku saeima” met with the Governor of Latvijas Banka, Mārtiņš Kazāks, to propose the withdrawal of the guidelines for identifying economically beneficial and detrimental activities for biodiversity, which were developed in cooperation with natural science experts. Given that the bank did not consult with the industries to which the guidelines will apply during the development of the document, the association is calling for the recommendations to be revised with the involvement of representatives from agriculture, forestry and other affected sectors.

The recommendations developed by Latvijas Banka are intended for credit institutions as an auxiliary tool when evaluating the granting of financing for economic activities. If the assessment is negative, banks may refuse financing to farms. Although the association supports the need to include sustainability issues in the evaluation process, it emphasises that credit institutions have been doing this for years by fulfilling the mandatory requirement to assess environmental, social and governance (ESG) risks. When making lending decisions, banks evaluate the possibilities of drought and flooding, climate change, energy and water consumption, potential sources of pollution, resource use and other aspects. At the same time, credit institution methodologies differ and unified guidelines could be a help, but biodiversity must not become the only sustainability aspect in the assessment process.

“Zemnieku saeima” does not object to the assessment of nature risks, but raises serious objections to how the guidelines were developed. Specifically, universities, scientific institutes, state institutions and non-governmental organisations were involved in the preparation, but no representative of the agricultural or forestry sectors participated. In the association's view, several criteria mentioned in the guidelines are detached from real economic activity.

“The criteria must be scientifically based, proportionate and practically implementable. It is impossible to achieve nature conservation goals without involving the people who manage land and forests on a daily basis in the development of documents. A farmer never chooses to consciously harm nature and seeks ways to treat it as carefully as possible. Several points mentioned in the guidelines are almost absurd from the point of view of economic activity, for example, by setting an optimal grazing load of no more than one head of cattle per hectare and crop diversification within a field if the arable land exceeds 10 ha. In trying to protect nature, we may halt viable farms,” emphasises Maira Dzelzkalēja-Burmistre, Vice-Chair of the Board of the association “Zemnieku saeima”.

The association sent an official letter to Latvijas Banka at the end of May calling for a re-evaluation of the necessity of such a document, by withdrawing the guidelines or improving them with the involvement of the relevant sectors. “Zemnieku saeima” has also requested an explanation as to how much the preparation of such guidelines cost. If a conceptual agreement is not reached in the discussion regarding the withdrawal or complete revision of the current recommendations, involving the industries, “Zemnieku saeima” will turn to the European Central Bank, requesting an assessment of Latvijas Banka’s justification for the necessity of such a document and its impact on the development of the national economy.